Spending Daily | May 10, 2013

TIME reports, “President Barack Obama’s campaign-style, jobs-focused swing through the Texas technology core on Thursday was notable mainly for what it left out—any plan for putting his proposals into law. … Ostensibly Obama flew to a Democratic enclave in the deep-red state to pitch his previously announced plan for 15 nationwide manufacturing innovation institutes and to highlight a new open-data initiative to make government releases ‘machine-readable.’ But his remarks touched on everything from universal pre-kindergarten to more resources for manufacturing. He was mostly silent on the Washington stalemate he left behind before boarding Air Force One. The cable networks largely ignored the two speeches, which focused on a litany of previously announced proposals.”

Presidents Calls for Raising Minimum Wage to $9 in Texas Visit

The Hill reports, “President Obama on Thursday declared that the nation is “poised for progress” but called on Congress to help strengthen the middle class by promoting economic polices he proposed in his State of the Union address in February. In a 20-minute speech at a technology school outside of Austin, Texas, Obama — who has been focused on the gun control and immigration debates in recent days — promoted his idea of raising the minimum wage to $9 an hour, as well as increasing spending on education, worker training programs and manufacturing-innovation centers. Those proposals have gained little traction in the GOP-held House, which is revving up for a new fight with Obama over the debt ceiling in the fall. … ‘I can tell you that this is a visit focused entirely on issues of economic and development and job creation,’ Carney said. ‘Austin is a center for innovation and development of high-tech jobs, jobs that come from the industries of the future, and that makes it an excellent place to visit to highlight the kind of activity that’s taking place in a variety of cities and states across the country where the creative energy of our entrepreneurs as well as our workers is contributing positively to economic growth and job creation.’ In his remarks, Obama said he chose Austin to deliver the speech ‘partly because I just love Austin.’ ‘But also because there are some terrific things going on in this area,” he said. “And there are things going on in communities all across the country that are good models for all of America to follow.’”

Entitlements Endangering Our Fiscal Future

According to The Associated Press, “With Congress increasingly unable to resolve budget disputes, federal programs on automatic pilot are consuming ever larger amounts of government resources. The trend helps older Americans, who receive the bulk of Social Security and Medicare benefits, at the expense of younger people. This generational shift draws modest public debate. But it alarms some policy advocates, who say the United States is reducing vital investments in the future. Because Democrats and Republicans can’t reach a grand bargain on deficit spending – with mutually accepted spending cuts and revenue hikes – Social Security, Medicare and Medicaid keep growing, largely untouched. Steady expansions of these nondiscretionary ‘entitlement’ programs require no congressional action, so they flourish in times of gridlock. Meanwhile, many discretionary programs are suffering under Washington’s decision-by-indecision habits, in which lawmakers lock themselves into questionable actions because they can’t agree on alternatives.”

Deficit Shrinking, But Not for Long

According to The Wall Street Journal, “Rising government revenue from tax collections and bailout paybacks are shrinking the federal deficit faster than expected, delaying the point when the government will reach the so-called debt ceiling and altering the budget debate in Washington. The improving financial picture got brighter Thursday when mortgage-finance giant Fannie Mae—which received a big dose of taxpayer aid during the financial crisis—said it would pay the U.S. government $59.4 billion in dividends at the end of June. That sum, as well as $7 billion and possibly more from fellow mortgage-finance firm Freddie Mac, will flow straight into the federal coffers. At the same time, steadily if historically slow economic growth and changes in tax laws that raised rates in January have pushed other government revenue up. The Congressional Budget Office now calculates the federal deficit through the first seven months of the fiscal year that began in October is $231 billion less than the deficit was at this time a year ago, thanks in part to an estimated 16% increase in tax revenue. The government has roughly $16.7 trillion in debt, with numbers rising because the government still spends more money than it brings in. And while the short-term deficit is shrinking, both parties know it is projected to widen dramatically in coming decades as the U.S. population ages unless changes are made to curb the growth of programs like Medicare.”

“No Lobby for Grandma Means a Budget Throwing Grandkids Off Train”

Bloomberg reports, “Margaret George, a retired widower raising her three young grandchildren in a trailer in Whispering Ranch, Arizona, says her family wouldn’t survive without federal help to pay for electricity. In March, she paid her $200 power bill thanks to a grant from the U.S. Department of Health and Human Services. Those costs rise with the temperature, which can top 100 degrees Fahrenheit in the desert town 50 miles northwest of Phoenix. ‘I don’t have the money to pay it,’ said George, 62, whose $640 energy assistance grant won’t last through the summer. ‘I would have already gotten it shut off it weren’t for that program — it was either pay the electric bill or it would be my grandchildren going without.’ Hundreds of miles away from the nation’s capital, Americans like Margaret George are experiencing the reality of automatic federal budget cuts on programs little noticed by Washington’s power brokers. At least $80 billion in reductions under a process known as sequestration are curtailing funding for AIDS drugs, help for returning military troops and projects for low-income families who don’t have clout in Congress. Although lawmakers last month approved an emergency measure to bring an end to air-traffic controller furloughs that sparked flight delays, there is little reason to expect that other cuts will be reversed, said Bill Hoagland, senior vice president of the Bipartisan Policy Center in Washington.”

Defense Department Says, “No, Tank You”

The Washington Guardian reports, “The U.S. spends more money on defense than any other nation in the world. So in an era of fiscal challenge, the Pentagon looked for ways to reduce costs. Too bad Congress wasn’t listening. Lawmakers have nixed several of the money-saving ideas, instead forcing the Defense Department to purchase or maintain equipment it says it doesn’t need. Take for instance the half-billion dollars in Abrams tanks that Congress ordered up for the next two years, or the seven obsolete ships the Navy is being forced to keep. … Last week, The Associated Press reported that Congress has authorized almost half-a-billion dollars over two years to build Abrams tanks for the Army. But the Army has said it currently doesn’t need any tanks, and the money would be better used elsewhere. ‘If we had our choice, we would use that money in a different way,’ Gen. Ray Odierno, the Army’s chief of staff, said.”

“Shrinking Budget Forces Army Into New Battlefield”

The Wall Street Journal reports, “The 1st Infantry Division’s 2nd Brigade is supposed to represent the Army’s new model—small and nimble. Lt. Col. Jason Wolter, a battalion commander in the brigade, said, half joking, he would conduct overseas training missions this year with ‘just the uniform on my back.’ Yet, the brigade landed here at the National Training Center ready for a full ground-war assault: 58 Abrams Tanks, each weighing 68 tons, along with 115 of the 33-ton Bradley Fighting Vehicles, a clutch of Humvees and a small fleet of drones. The apparent contradiction illustrates the Army’s dilemma. As it prepares for peacetime budget cuts, the Army must shrink. But Pentagon officials say reducing ground forces too much would leave the U.S. vulnerable to threats by such countries as North Korea or Iran. That means continuing to train with tanks, heavy weaponry and big formations—and, in the view of some military analysts, pulling the Army back to its roots and away from its promised future.”

Health and Human Services Will Spend $150 Million to Teach People How to Enroll in Health Care Exchanges

The Washington Examiner reports, “Health and Human Services Secretary Kathleen Sebelius announced Thursday that HHS will spend $150 million to teach people how to enroll in the Obamacare exchanges, after a Democratic senator scolded her for running a poor ‘public information campaign.’ ‘Investing in health centers for outreach and enrollment assistance provides one more way the Obama administration is helping consumers understand their options and enroll in affordable coverage,’ Sebelius said Thursday. HHS promised that the health centers would provide ‘unbiased information to consumers’ about various provisions in the law. The health centers funding complements the navigators program, HHS noted. The Washington Examiner’s Paul Bedard reported that tens of thousands of people would be paid between $20 and $48 an hour to serve as “navigators” to help others enroll for the law’s benefits.”

Obamacare Clashes, Confusion in Colorado

The Denver Post reports, “Conservative voices clashed with Obamacare planners and consumer advocates Monday over a $125 million Colorado request for federal funding to launch a subsidized health-insurance exchange. Consumer groups hit the health-exchange board for cutting a $20 million request for outreach to new customers, arguing that few Coloradans know about the exchange and every penny is needed to guide confused patients through reforms. More conservative voices on the Connect for Health Colorado board, meanwhile, attacked the overall $125 million federal grant request as irresponsible to taxpayers and the start of a bloated system. …The board’s research has shown only one in 10 Coloradans understands what the health exchange will do and how it will provide insurance subsidies to Coloradans. The exchange is one of the two key pieces of ‘Obamacare’ meant to extend insurance to millions of Americans; the other is a wide expansion of Medicaid eligibility.”

Obama Tries to Rally Public Around Health Care Changes

The Associated Press reports, “President Barack Obama is launching a new effort to rally the public around his hotly disputed health care law, a strategy aimed at shoring up key components of the sweeping federal overhaul and staving off yet another challenge from Republicans. The president will specifically target women and young people, groups that backed him overwhelmingly during his presidential campaigns. During a Mother’s Day-themed event at the White House on Friday, Obama will promote the benefits of the law for women, including free cancer screenings and contraceptives, and ask moms to urge their uninsured adult children to sign up for the health insurance ‘exchanges’ that open this fall. … White House advisers acknowledge they struggled in explaining the complex law to the public when it passed in 2010. Now, with the final components being implemented, Obama allies see a fresh opportunity to sell the American people on the merits of measures that will be central to the president’s legacy. ‘We’re in the phase for the actual meat of the law to come online,’ said Neera Tanden of the Center for American Progress, a liberal group aligned with the White House. ‘It’s important for the public to recognize that the law has tangible benefits to people so they feel comfortable enrolling.’”

Tax Code Adventures with ‘Max and Dave’

The National Journal reports, “After months of trying to convince fellow lawmakers that tax reform was crucial and inevitable, Congress’s top tax-writers took their message to the Internet Thursday in hopes of building public support for their efforts. Their newly unveiled website, taxreform.gov, encourages people to share stories and ideas for rejiggering the tax code with ‘Max and Dave,’ better known in Washington as Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, and Rep. Dave Camp, D-Mich., chairman of the House Ways and Means Committee. If people do not want to share anecdotes, they can follow along with the new Twitter account known as ‘@simplertaxes.’ Or, they can peruse the no-frills site (this is no BuzzFeed) to read various proposals for taxing small businesses, financial instruments, global corporations, or business investments.”

Some Republicans Eager to Move Forward with Budget

POLITICO reports, “Several Senate Republicans are at odds with their leadership about the decision to delay sending the budget to conference with the House. ‘I’m very much in favor of it, and I think we ought to do it right away,’ Sen. John McCain (R-Ariz.) told POLITICO. ‘And I think for us to after four years of complaining about Harry Reid’s failure to bring up a budget and then we do one and block conference is something that’s incomprehensible.’ Sen. Rob Portman (R-Ohio), the former director of the Office of Management and Budget, said he thinks Majority Leader Harry Reid (D-Nev.) should simply force a vote on sending the budget to conference. If he did so, Portman said he would vote in favor of starting the conference process. For weeks now Democrats have been publicly beating up on Republicans for refusing to agree to a conference after the Senate and House both passed budgets in April. Democrats feel they have a winning hand and can convince voters this is another example of the Republicans obstructing progress.”

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